> The financial accounting myopia has produced the mirror image of that
> incomplete socialist accounting. Instead of discounting capital depreciation
> and assigning fictional values to inventory, it discounts the social costs
> of labour and thereby enormously inflates the value of financial assets. The
> "way forward" according to such a distorted view is to further depreciate
> labour.
>
> The lesson of the Asian crisis is that the limit of fictional accounting has
> been reached. Humpty-dumpty has fallen off the wall.
This rings a little bell in my fossilized memory
of Marx. Why do capitalists persist in
over-valuing their financial assets when it gets
them into trouble later? Why don't the smart
ones breed out the dumb? Why must volatility
give way to total collapse? And if it mustn't,
what's the big deal?
Secondly, why should capitalist accountants
record the depreciation of an asset which they do
not own? Presumably they can buy labor in
whatever state they like.
Cheers,
MBS
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